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Planning your escape from full-time work

March 27, 2023

Planning your retirement from full-time work:

Retirement means different things to different people. For some, it means pursuing work in a new vocation. For others, it means complete freedom from work to pursue hobbies and interests enthusiastically. However you define retirement, envision it clearly so you can fine-tune your financial plans.   Famous American poet Carl Sandburg once said, “nothing happens unless first we dream.”  So find a quiet place, pour a great glass of wine, and contemplate your future. Where are you living? Are their beaches, boating, and palm trees?   Is there an active golf or pickleball league?  Can you audit college classes nearby? Live music? Be sure to list your favorite activities as part of your process. Think about the travel you wish to embark on and the people you want to spend more time with.  When finished, be sure to write down all of your goals and aspirations.

With your retirement dreams in hand, how much money will you need for your retirement goals? Your monthly budget should start with basic costs such as housing, food, utilities, healthcare, insurance, etc., and then add the expenses from your retirement dream list. Famous broadcaster and author Earl Nightingale once uttered. “As in all successful ventures, the foundation of a good retirement is planning.”  Sage words for those planning to pursue their retirement dreams.

Now that your goals and associated costs are determined consider your income sources. Go onto the ssa.gov Social Security website to get your updated income projections. Reach out to your human resources department for an explanation of benefits and pension projections, if applicable.  If you own a business, speak to your CPA and a valuation expert well before retirement for potential ways to monetize it.  Having been involved in many business sales over the years, I can tell you that preparing for a sale takes much longer than you think. Start preparing your business now if you plan on selling in the next five to seven years. To determine your overall income projections, consider your savings, investments, rentals, and social security. Use reasonable rates of return as markets over the next decade may be muted. Include inflation costs and taxes as part of your assessment. A financial advisor can help you sort your options, run projections, and suggest appropriate allocations.

You may need to adjust your investment allocations based on your planning projections.   If you are projecting a shortfall, you may need to save more, work longer,  or take on more risk than you might find comfortable. If your planning suggests you can afford to reduce risk in your portfolio,  why invest aggressively in equities?

Review your debts.  Retiring with debt such as a mortgage and credit card debt can be a burden once you stop receiving your weekly paycheck. Be sure to pay down high-cost debt before calling it quits. 

Once you complete the above, congratulate yourself and use your dreams as motivation as you move towards your optimal retirement and escape from full-time work.

Published in New Haven Register on 3/25/23